This the first long-term economic analysis provided by the government. The document assesses continued UK membership of the EU against the three existing alternative models.

One is if the UK opts for membership of the European Economic Area (EEA), like Norway; the second is if the UK negotiates a bilateral agreement, such as that between the EU and Switzerland, Turkey or Canada; and the third option is for World Trade Organisation (WTO) membership without any form of specific agreement with the EU, like Russia or Brazil.

According to the Treasury, under a negotiated bilateral agreement, which it regards as the ‘central assumption’, British households would be worse off £4,300  annually after 15 years and overall GDP would be lower by 6.2%. The equivalent in the case of EEA membership is £2,600, and for WTO membership it is £5,200.

There would also be a significant hit to tax receipts, equivalent to an 8p increase in the rate of income tax.

The analysis also finds that the negative impact on GDP would result in substantially weaker tax receipts over the 15 year timeframe. This would significantly outweigh any potential fiscal gain from reduced financial contributions to the EU, which are a little over 1p for every £1 of tax paid once the UK’s rebates and receipts are taken into account. The result would be higher government borrowing, large tax rises or major cuts in public spending.

The Treasury estimates that the central net effect on tax receipts would amount to a  £20bn drop in the case of EEA membership, £36bn less in the case of a negotiated bilateral agreement, and £45bn less in the case of WTO membership.

The Treasury’s argument is that its analysis finds that under each model, compared to remaining in the EU Britain’s economy would become less open in each, leading to lower trade and investment. This would result in lower productivity and ultimately feed through into lower wages and living standards for working people, leaving the country ‘permanently poorer’.

The document also shows that once all trade deals currently under negotiation are completed, more than 80% of UK trade will be with either the EU or through EU free trade agreements.

Chancellor George Osborne described the 200-page document as a ‘rigorous analysis of the long term economic impacts of EU membership and the alternatives’.

‘The analysis shows that a vote to Leave would mean Britain would be permanently poorer, to the tune of £4,300 a year for every household. Under any alternative, we’d trade less, do less business and receive less investment. And the price would be paid by British families. Wages would be lower and prices would be higher.

‘Leaving the EU would be the most extraordinary self-inflicted wound,’ Osborne said.

The Treasury is expected to produce further analysis on the short-term implications of leaving the EU before June.

The publication of the report follows comments from the Chancellor last Friday that mortgage rates would have to rise as a result of a no vote, adding to voter confusion. Crtitics say that the latest report fails to take into account the impact of the reduction in the current EU membership subsidy of around £11bn a year, although some of this is fed back to the UK through rebates and education, and research and develoment grants, as well as funding for regional regeneration.

Recent comments from the Bank of England governor Mark Carney point to a high risk to foreign investment in the event of a Brexit exit, with uncertainty colouring the investment decisions of global companies until the government negotiates new trade deals with the EU.

The Treasury Brexit long-term economic impact analysis is here